Cenovus

Merger activity this year has been frequent in Canada’s oil and gas sector as companies strive for scale and efficiencies in an increasingly competitive landscape. The latest M&A salvo arrived in late August when MEG Energy agreed to a takeover offer from Cenovus Energy to create the largest bitumen producer in Alberta’s oil sands. With billions of barrels of reserves up for development, it is a chance for Cenovus to further consolidate and expand its existing lead in bitumen output from the oil sands. However, what might seem a straightforward corporate merger has been buffeted by a rival bid from Strathcona Resources in its attempt to create scale and ensure its own long-term competitiveness. In today’s RBN blog, we’ll examine the details of the two offers and what is at stake for all involved. 

On October 25, a major consolidation of two Canadian oil and gas companies was announced with the planned merger of Cenovus Energy and Husky Energy. The prospective consolidation will offer the opportunity for corporate-level synergies and, over the longer term, for the physical integration of some of the companies’ operations, especially in Alberta’s oil sands. In today’s blog, we discuss some of the more nuanced elements of the consolidation, including potential improvement in crude oil market access and the larger presence of the combined company in PADD 2 refining, a sector that has taken a major hit during the pandemic. This blog also introduces a new weekly report from RBN and Baker & O’Brien: U.S. Refinery Billboard.

On October 25, a major consolidation of two Canadian oil and gas companies was announced with the planned merger of Cenovus Energy and Husky Energy. The prospective consolidation will offer the opportunity for corporate-level synergies and, over the longer term, for the physical integration of some of the companies’ operations, especially in Alberta’s oil sands. In today’s blog, we discuss some of the more nuanced elements of the consolidation, including potential improvement in crude oil market access and the larger presence of the combined company in PADD 2 refining, a sector that has taken a major hit during the pandemic. This blog also introduces a new weekly report from RBN and Baker & O’Brien: U.S. Refinery Billboard.